U.S. stock futures were solidly higher Monday morning, indicating a similar start to U.S. markets, after a very interesting weekend in which a government plan was set in motion to rescue ailing mortgage giants Fannie Mae and Freddie Mac and Budweiser maker accepted a $52 billion buyout offer.Last week, and Friday was no exception, stocks tumbled due to concerns over government-sponsored mortgage buyrs Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) and their possible insolvency. On Friday, the Dow industrials fell 128 points, or 1.14%, the Nasdaq Composite closed 18 points, or 0.83%, lower, and the S&P 500 dropped 13 points, or 1.11%.
But this morning, all that changed after Sunday the Federal Reserve and the Treasury Department announced steps to bolster the slumping mortgage giants Fannie Mae and Freddie Mac. The plan, "is intended to signal the government is prepared to take all necessary steps to prevent the credit market troubles that erupted last year with losses from subprime mortgages from engulfing financial markets." That includes granting Fed New York authority to lend the two as much as necessary. FNM shares are 28% higher and FRE shares are 29% in premarket trading.
Still, while the government may have choice but to help its sponsored mortgage companies, it has signaled it won't help other struggling financial companies, leaving Lehman Brothers and others to fend for themselves, unlike the scenario with Bear Stearns.
The Fannie/Freddie rescue plan is not the only think boosting markets this morning. A giant beer deal is also helping sentiment on the Street. Finally Anheuser-Busch (NYSE: BUD) the maker of iconic American brands Budweiser and Bud Light, has agreed to a $52 billion takeover offer from giant Belgian brewer, Inbev NV. The deal will create the world's largest brewer.
Unlike Anheuser, Yahoo! (NASDAQ: YHOO) again rejected what some say was a better offer from Microsoft (NASDAQ: MSFT) and Carl Icahn that over the weekend. The offer, though, was only for Yahoo's search operation.
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Reader Comments (Page 1 of 1)
7-14-2008 @ 9:07AM
Dr. Max Chartrand said...
We are drilling US oil and shipping it overseas more and more everyday, because the big refineries are locked into abysmal overseas' contracts. Not just a few barrells but millions of barrerls of US oil are being shipped overseas. The last word I received was that the Saudis are only charging us $47-50 per barrell, the rest is speculators investing billions in future oil supplies, bidding up the current price of oil to compete (or match) future oil supplies. This is a travesty, and if our spineless Democratic Congress would do something about could cause a $1 drop in a gallon of gas at the pump in a matter of weeks in doing so. If only the public could see how a Democratic administration will mean a perpetuation of the current policies of a Democratic Congress, only moreso with so many more anti-business and anti-free market politicians shifting tax dollars toward getting as many voting blocks onto the government dole. We'd better get busy and get the likes of Mitt Romney and fiscally conservative Republicans in office or what we will see will be far worse than we have now.
7-14-2008 @ 9:13AM
Dr. Max Chartrand said...
We are drilling US oil and shipping it overseas more and more everyday, because the big refineries are locked into abysmal overseas' contracts. Not just a few barrells but millions of barrerls of US oil are being shipped overseas. The last word I received was that the Saudis are only charging us $47-50 per barrell, the rest is speculators investing billions in future oil supplies, bidding up the current price of oil to compete (or match) future oil supplies. This is a travesty, and if our spineless Democratic Congress would do something about could cause a $1 drop in a gallon of gas at the pump in a matter of weeks in doing so. If only the public could see how a Democratic administration will mean a perpetuation of the current policies of a Democratic Congress, only moreso with so many more anti-business and anti-free market politicians shifting tax dollars toward getting as many voting blocks onto the government dole. We'd better get busy and get the likes of Mitt Romney and fiscally conservative Republicans in office or what we will see will be far worse than we have now.